Stock Valuation Methods in Accounting: FIFO, LIFO & AVCO

Stock valuation enables accurate control of stock, showing how much money has been invested in items or materials and helping to prevent stock being lost or stolen.

In this guide, we give you a basic grounding in stock valuation within the context of accounting, looking the following:

  • What stock valuation is
  • Why we use it in accounting
  • Which accounts stocks are entered into
  • How stock is tracked
  • The most common methods of stock valuation: FIFO, LIFO and AVCO
  • Lower of cost and net realisable value
  • The importance of consistency

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